The denarius was a coin commonly used in the Roman empire from 211 B.C. to the 3rd century C.E.
One denarius was about the equivalent to the day’s work of a soldier, or just over 20 U.S. dollars.
Starting in the 1st century C.E., there was a need for more denarii to be minted in the Roman Empire, so the coin was slowly devalued for over 2 centuries.
When the denarius was first minted, it was made of 100% silver, but by 270 C.E., the silver content in a denarius was only .02%.
Inflation is an increase in currency relative to the availability of the currency, causing an increase in the price of goods and services.
Inflation is usually the result of high demand of products, but low supply of products.
Commodus, the end of the period of the five good emperors of Rome, depleted all the imperial coffers of Rome.
By the time Commodus was assassinated, the Roman empire had almost no money left.
Rome could no longer afford to pay soldiers, and soldiers were only very thinly spread throughout the empire, leaving the empire very vulnerable.
Tribes that had invaded the empire seized their chance to attack Rome, as the empire’s army was very small and spread out.
They completely ransacked and destroyed Rome, and territory previously owned by Romans was then handed down to the invasive tribes.
Current Inflation in the United States
When demand goes up by more than supply, inflation occurs, which is the lowering of the purchasing power of currency.
When inflation occurs and wages go up, people have even more to spend and prices go up even more.
Low to moderate inflation is actually good for an economy essential for economic growth, but too much can damage the economy by devaluing the dollar.
When consumers expect prices to rise, they buy products now rather than later, which increases demand and prices go up.
The cycle goes on and and on and is important for a strong economy.
A healthy inflation rate is an annual rate of 2%.
The current inflation rate in the United states from December 2011 to December 2012 was 1.7%.
Since 2000, the average inflation rate has been about 2.5-3%.
The highest point of inflation since 2000 was 6% in 2008, and the lowest was -2% in 2009.
A solution to inflation is having the government raise interest rates, which determine how much it costs to borrow money.
Higher interest rates means that companies and people won’t borrow as much, and this will slow down spending, which will decrease inflation.
Another solution is for the government to decrease the amount of money in circulation.
This will decrease the amount of money that people will spend, thereby lowering the percentage inflation increase.
Solutions to Inflation in ancient Rome
One solution to save the Roman empire from inflation is to increase taxes on wealthier to bring in more government revenue.
Another is to increase the amount of silver in denarii, but decrease the amount of coins minted in the empire.
This will ensure that the coin is not devalued and inflation will be less likely to occur.
The government could also cut back on unnecessary and unaffordable spending to decrease inflation, such as expensive food and resources and unnecessary expansion.
In addition, the government could tax certain areas of land based on how useful and profitable their natural resources are.
This would create a larger profit in trading with foreign countries, which would decrease the chances of inflation.
Morever, the government could focus in on extracting profitable natural resources nto bring in a larger revenue of money.
Another solution is to create more jobs with slightly lower wages so that (even though people won't get paid quite as much) more people will be able to work for a living.
Finally, the government could increase trade to create more economy and tax gain.
Expert Contact
Tim Fuller, professor of AP U.S. Government, AP Macroeconomics, National Issues, and Applied Economics at Anderson High School
Ancient Roman Inflation
The denarius was a coin commonly used in the Roman empire from 211 B.C. to the 3rd century C.E.
One denarius was about the equivalent to the day’s work of a soldier, or just over 20 U.S. dollars.
Starting in the 1st century C.E., there was a need for more denarii to be minted in the Roman Empire, so the coin was slowly devalued for over 2 centuries.
When the denarius was first minted, it was made of 100% silver, but by 270 C.E., the silver content in a denarius was only .02%.
Inflation is an increase in currency relative to the availability of the currency, causing an increase in the price of goods and services.
Inflation is usually the result of high demand of products, but low supply of products.
Commodus, the end of the period of the five good emperors of Rome, depleted all the imperial coffers of Rome.
By the time Commodus was assassinated, the Roman empire had almost no money left.
Rome could no longer afford to pay soldiers, and soldiers were only very thinly spread throughout the empire, leaving the empire very vulnerable.
Tribes that had invaded the empire seized their chance to attack Rome, as the empire’s army was very small and spread out.
They completely ransacked and destroyed Rome, and territory previously owned by Romans was then handed down to the invasive tribes.
Current Inflation in the United States
When demand goes up by more than supply, inflation occurs, which is the lowering of the purchasing power of currency.
When inflation occurs and wages go up, people have even more to spend and prices go up even more.
Low to moderate inflation is actually good for an economy essential for economic growth, but too much can damage the economy by devaluing the dollar.
When consumers expect prices to rise, they buy products now rather than later, which increases demand and prices go up.
The cycle goes on and and on and is important for a strong economy.
A healthy inflation rate is an annual rate of 2%.
The current inflation rate in the United states from December 2011 to December 2012 was 1.7%.
Since 2000, the average inflation rate has been about 2.5-3%.
The highest point of inflation since 2000 was 6% in 2008, and the lowest was -2% in 2009.
A solution to inflation is having the government raise interest rates, which determine how much it costs to borrow money.
Higher interest rates means that companies and people won’t borrow as much, and this will slow down spending, which will decrease inflation.
Another solution is for the government to decrease the amount of money in circulation.
Solutions to Inflation in ancient Rome
One solution to save the Roman empire from inflation is to increase taxes on wealthier to bring in more government revenue.
Another is to increase the amount of silver in denarii, but decrease the amount of coins minted in the empire.
This will ensure that the coin is not devalued and inflation will be less likely to occur.
The government could also cut back on unnecessary and unaffordable spending to decrease inflation, such as expensive food and resources and unnecessary expansion.
In addition, the government could tax certain areas of land based on how useful and profitable their natural resources are.
This would create a larger profit in trading with foreign countries, which would decrease the chances of inflation.
Morever, the government could focus in on extracting profitable natural resources nto bring in a larger revenue of money.
Another solution is to create more jobs with slightly lower wages so that (even though people won't get paid quite as much) more people will be able to work for a living.
Finally, the government could increase trade to create more economy and tax gain.
Expert Contact
Tim Fuller, professor of AP U.S. Government, AP Macroeconomics, National Issues, and Applied Economics at Anderson High School
Gill, N.S.. "Economic Reasons for the Fall of Rome."About.com. N.p., n.d. Web. 15 Jan 2013. <http://ancienthistory.about.com/od/fallromeeconomic/a/econoffall.htm>.
"The Fall of Ancient Rome." History Learning Site. N.p., n.d. Web. 15 Jan 2013. <http://www.historylearningsite.co.uk/fall_of_ancient_rome.htm>.
"Collecting Roman Coins - The Denarius."Detecting.org.uk. N.p., n.d. Web. 19 Jan 2013. <http://www.detecting.org.uk/romancoins/roman-coin-denarius.html>.